IBM, Philips To Jointly Develop RFID

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Royal Philips Electronics and IBM said Monday that the two companies will work together to develop radio-frequency identification tags (RFID) for use within Philips and later in the mass market.

Philips Semiconductors will produce the chips themselves, which will initially be used to tag semiconductor wafer cases and carton packages within Philips Semiconductors’ Kao Hsiung manufacturing site in Taiwan and the division’s distribution center in Hong Kong.

IBM, meanwhile, will bring its services arm to bear, developing and adapting consulting, management, and implementation products to use the technology. The project started in November and will be fully live during the course of 2004, the companies said.

RFID uses a thin, uniquely-identifiable chip embedded within a “tag” to track inventory as it moves through the supply chain. Larger, “active” tags are typically used for tracking pallets of information; the active tags contain their own power supply and can transmit information farther than passive tags, which are smaller, cheaper, and can be read from a much shorter distance. Although the notion of uniquely identifiable objects worries some prvacy experts, both the Department of Defense and retailing giant Wal-Mart Stores Inc. are rolling out their own RFID programs with a target of January 2005.

“Our relationship with IBM will mean stronger time-to-market, improved customer confidence levels and the opportunity to leverage each others’ brands and expertise,” said Scott McGregor, president and chief executive officer, Philips Semiconductors, in a statement. “It is Philips’ mission to continue bringing greater benefits to both companies and today’s ‘Connected Consumers’ — enabling them better access to information, entertainment and services. To this end, the RFID system in East Asia being built by IBM is a good illustration of Philips adopting the very technology it is driving into the marketplace.”

In other RFID news, Socket Communications said Monday that it will license SkyeTek’s RFID technology for the mobile and handheld markets, allowing Socket to develop PDA-based devices for scanning RFID tags. Early technology demonstration and developer products are expected to be available in the first half of 2004, the company said.

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